Income Statement for the period ended 31 August 2016
Published: 2020/09/10 • Number of words: 3275
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Hawthorn Ltd Income Statement for the period ended 31 August 2016
| Hawthorn Ltd | |||||||
| Income Statement for the period ended 31 August 2016 | £ | ||||||
| Sales | 2,945,000 | ||||||
| Less: cost of sale | |||||||
| Opening stock | 384,000 | ||||||
| Purchases | 1,375,000 | ||||||
| Closing stock | (396,000) | (1,363,000) | |||||
| Gross Profit | 1,582,000 | ||||||
| Other Operating Income | 27,600 | ||||||
| 1,609,600 | |||||||
| Less: Operating Expenses | |||||||
| Administration (Note 1) | (661,800) | ||||||
| Distribution Note 2) | (320,080) | ||||||
| Marketing | (279,300) | ||||||
| Reduction in allowance for receivables (Note 3) | 5,800 | ||||||
| Audit Fee | (7,000) | (1,262,380) | |||||
| Operating Profit | 347,220 | ||||||
| Interest expense | (13,500) | ||||||
| Tax expense | (67,544) | ||||||
| Net profit | 266,176 | ||||||
| Note 1 | |||||||
| Admin Balance brought forward | 217,000 | ||||||
| Depreciation – equipment (307,000*0.1) | 30,700 | ||||||
| Energy expense (16,300 + 2,700) * 0.7 | 13,300 | ||||||
| Salaries (534,000*0.7) | 373,800 | ||||||
| Rent (24500+5000-2500) | 27,000 | ||||||
| 661,800 | |||||||
| Note 2 | |||||||
| Distribution Balance brought forward | 130,100 | ||||||
| Depreciation – M.V (235,000+23,000-137,600)*0.2 | 24,080 | ||||||
| Energy expense (16,300 + 2,700) * 0.3 | 5,700 | ||||||
| Salaries (534,000*0.3) | 160,200 | ||||||
| 320,080 | |||||||
| Note 3 | |||||||
| Receivables Balance | 436,500 | ||||||
| Less: written off | (6,500) | ||||||
| 430,000 | |||||||
| Allowance at 4% | 17,200 | ||||||
| Previous allowance | 23,000 | ||||||
| Reduction | 5,800 | ||||||
| Hawthorn Ltd | |||||||
| Statement of Financial Position as at 31 August 2016 | £ | ||||||
| Non Current Assets | |||||||
| Equipment at cost | 307,000 | ||||||
| Accumulated depreciation (195,000+30,700) | (225,700) | 81,300 | |||||
| Motor Vehicle at Cost | 258,000 | ||||||
| Accumulated depreciation (137,600+24,080) | (161,680) | 96,320 | |||||
| 177,620 | |||||||
| Current Assets | |||||||
| Non-current investments | 12,500 | ||||||
| Stock | 396,000 | ||||||
| Receivables | 412,800 | ||||||
| Cash | 354,200 | ||||||
| Prepaid expense | 4,000 | 1,179,500 | |||||
| Total Assets | 1,357,120 | ||||||
| Equity and Liabilities | |||||||
| Ordinary £1 shares | 175,000 | ||||||
| Share premium | 75,000 | ||||||
| Retained earnings (From SOCE) | 492,976 | ||||||
| 742,976 | |||||||
| Non-current liabilities | |||||||
| 6% debentures | 225,000 | ||||||
| Current liabilities | |||||||
| Energy payable | 2,700 | ||||||
| Trade payables | 298,400 | ||||||
| Tax payable | 67,544 | ||||||
| Interest payable | 13,500 | ||||||
| Audit fee payable | 7,000 | 389,144 | |||||
| 1,357,120 | |||||||
| Hawthorn Ltd | |||||||||
| Statement of Changes in Equity for the period ended 31 August 2016 | £ | ||||||||
| Retained earnings at 1 September 2015 | 244,300 | ||||||||
| Profit for the year | 266,176 | ||||||||
| Dividends Paid | (17,500) | ||||||||
| 492,976 | |||||||||
| Citron plc | ||
| Ordinary dividend paid during the year ended 31 December 2016 | ||
| Retained earnings @ 31 December 2015 | 157,478 | |
| Profit for the year (302,365-15,000-70,470) | 216,895 | |
| Retained earnings @ 31 December 2016 | 289,373 | |
| Dividend Paid | 85,000 | |
| Citron plc | ||
| Statement of Cash Flows for the year ended 31 December 2016 | ||
| Profit before taxation | 302,365 | |
| Add: Depreciation (Note 1) | 147,102 | |
| Add: Loss on disposal (Note 2) | 5,000 | |
| 454,467 | ||
| Less Tax paid (Note 3) | (68,624) | |
| Changes in Woking Capital | ||
| Increase in Inventory (385,245 – 299,993) | (85,252) | |
| Increase in receivables (273,669 – 194,625) | (79,044) | |
| Increase in payables (234,596 – 138,443) | 96,153 | |
| (68,143) | ||
| Cash generated from operations | 317,700 | |
| Cash flow from investing activities | ||
| Additions in Property, plant and equipment (Note 4) | (309,500) | |
| Disposal proceeds | 55,000 | |
| (254,500) | ||
| Cash flow from financing activities | ||
| Equity issued (60,000*1.5) | 90,000 | |
| Loan added | 80,000 | |
| Interest paid | (15,000) | |
| Dividends paid | (85,000) | |
| 70,000 | ||
| Net Cash flow during the year | 133,200 | |
| Cash and Cash Equivalents at the start of the year (o/d) | (120,352) | |
| Cash and Cash Equivalents at the end of the year | 12,848 | |
| Note 1 | ||
| Accumulated depreciation @ 31 December 2015 | 214,110 | |
| Depreciation on asset sold | 20,000 | |
| Accumulated depreciation @ 31 December 2016 | 341,212 | |
| Depreciation for the year | 147,102 | |
| Note 2 | ||
| Equipment at NBV | 60,000 | |
| Disposal proceeds | 55,000 | |
| Loss on disposal | (5,000) | |
| Note 3 | ||
| Tax payable @ 31 December 2015 | 95,985 | |
| Tax expense for the year | 70,470 | |
| Tax payable @ 31 December 2016 | 97,831 | |
| Tax paid | 68,624 | |
| Note 4 | ||
| Property, plant and equipment at cost @ 31 December 2015 | 411,750 | |
| Disposals at cost | 80,000 | |
| Property, plant and equipment at cost @ 31 December 2016 | 641,250 | |
| Additons during the year | 309,500 | |
| 31 December 2016 | 31 December 2015 | |||||||
| Current Assets | 671,762 | 494,618 | ||||||
| Current Liabilities | 332,427 | 354,780 | ||||||
| Inventory | 385,245 | 299,993 | ||||||
| Current Ratio | 2.02 | 1.39 | ||||||
| Acid Test Ratio | 0.86 | 0.55 | ||||||
| Citron Plc has substantially improved on the liquidity and solvency position over the year. At the end of 2015 it only had £1.39 worth of liquid assets to repay £1 worth of current liabilities, however, the liquidity poistion significantly improved the next year where it had £2.02 worth of current assets for every £1 of short term obligations.The primary driver for growth in cash flows has been the trading performance during the year. While it can be argued that the working capital management was not entirely impressive during the year, the movements in inventory and debtor balances make sense as greater investment in debtors and stocks is required when the company aspires to increase sales. The growth in payable balances is greater than thee movement in inventory implying that good credit terms have been negotaiated with the suppliers.Furthermore, substantial investments in PPE have been made which appear natural given the increase in sale as the company should require suffficient sustenance capex to meet the volumetric needs for the upcomming year. The growth in cash flows was further attributable to the additional financing obtained by the company with almost equal financing obtained through the debt and equity medium. All in all, Citron plc was quite successful from converting a net overdraft position in 2015 to a positive cash flow in 2016. | ||||||||
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